IU public finance experts embark on China infrastructure study

BLOOMINGTON, Ind. -- Public finance experts at the Indiana University School of Public and Environmental Affairs will collaborate with colleagues at a Chinese university on a study of the financing of local public infrastructure in China's Guangdong Province.

Project director John Mikesell, a professor of public finance at IU Bloomington, said the project will examine how projects are funded, how capital budgeting takes place, and how decisions are made regarding the financing of highways, public office buildings, water supply systems and other infrastructure.

The project is supported by the Lincoln Institute of Land Policy, a Cambridge, Mass., nonprofit organization that sponsors research, holds conferences, provides education and publishes reports on land and tax policy.

Mikesell and Jun Ma, a faculty member at Sun Yat-sen University in Guangzhou, China, are principal investigators for the project. Co-investigators are Alfred Ho, associate professor in the School of Public and Environmental Affairs at Indiana University-Purdue University Indianapolis; and Meili Niu of Sun Yat-sen University.

Also working on the project are Janey Wang, a doctoral student in public affairs in SPEA at IU Bloomington, and three doctoral students from China's Renmin and Sun Yat-Sen universities who are conducting research at IU Bloomington and IUPUI.

With rapid economic growth and increased urbanization taking place in China, developing and maintaining public infrastructure has become a crucial policy challenge for Chinese government officials, Mikesell said.

"They're interested in problems of public finance," he said. "Their population growth and their economic growth have outstripped the capacity of public infrastructure."

The project, which will include both qualitative and quantitative analysis, will use Guangdong Province as a case study to look at how infrastructure financing decisions are made and overseen by different governmental and political entities in the Chinese system. Scheduled for completion this fall, it will produce recommendations for future reforms, including the use of fees and charges, public debt financing, private capital, and possible adoption of property taxes.

Guangdong, located in southeastern China on the South China Sea, is China's wealthiest and most populous province, with more than 93 million residents and per-capita gross domestic product of more than $4,000 (U.S.) in 2007.

About the Lincoln Institute of Land Policy

The Lincoln Institute has had an active program in China for the last several years, addressing the country's rapid urbanization, farmland conversion and issues such as a property tax system. The director of its China program in Beijing is Joyce Yanyun Man, a specialist in urban and regional economics and public finance, and associate professor at the IU School of Public and Environmental Affairs. Under her direction, the Institute recently established the Center for Urban Development and Land Policy based at Peking University in Beijing. For more information on the Institute's China program, see http://www.lincolninst.edu/aboutlincoln/prc.asp. For information about the Institute, contact Anthony Flint at anthony.flint@ lincolninst.edu.